2018 (12) TMI 847 - AT - Central Excise

CENVAT Credit - input services - services received by them from the various transporters towards outward transportation of excisable goods from the appellant s factory to the buyer s premises (carriage outwards) - period 2006-2007 and 2007-2008 - Held that - The present issue is no more res-integra and is decided in favour of the appellant in view of the decision of the Hon ble Supreme Court in the case of Commr. of Customs, Central Excise & S.Tax, Guntur Vs. Andhra Sugars Ltd. 2018 (2) TMI 285 - SUPREME COURT OF INDIA , where it was held that Once it is accepted that place of removal is the factory premises of the assessee, outward transportation from the said place would clearly amount to input service. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over Cenvat credit for service tax on outward transportation of excisable goods.

Analysis:
The appeal concerns a dispute regarding the Cenvat credit availed on service tax paid for outward transportation of excisable goods from the factory to the buyer's premises during 2006-2008. The appellant contested the impugned Order-in-Appeal issued by the Commissioner of CGST & C.Ex. (Appeals), Kolkata. The main contention revolved around whether outward transportation beyond the place of removal qualifies as an input service for availing Cenvat credit.

Upon examination, it was found that the issue at hand had been previously addressed by the Hon'ble Supreme Court in the case of Commr. of Customs, Central Excise & S.Tax, Guntur Vs. Andhra Sugars Ltd. The Court ruled that outbound transportation from the place of removal constitutes an input service eligible for Cenvat credit. The definition of 'input service' prevailing at the relevant time supported this interpretation, allowing credit for services used in the clearance of final products from the place of removal to the warehouse or customer's place.

The concept of 'place of removal' was crucial in determining the eligibility for availing credit on service tax paid for transportation during the removal of excisable goods. The Circular issued by the Board clarified that the 'place of removal' could be the factory premises, a warehouse, or the customer's place under certain conditions. The Circular emphasized that outbound transportation from the place of removal qualifies as an input service, provided the goods are directly dispatched to the customer from that location.

In light of the Supreme Court's judgment and the interpretation of the 'place of removal,' the Tribunal set aside the impugned order, ruling in favor of the appellant. The decision highlighted that outbound transportation from the place of removal, whether to a warehouse or the customer's premises, falls within the ambit of input services eligible for Cenvat credit. This comprehensive analysis of the legal provisions and precedents led to the allowance of the appeal by the Tribunal, emphasizing the importance of understanding the nuances of the 'place of removal' in determining Cenvat credit eligibility for outward transportation services.